Hubilu Venture Corp [HBUV] Filings

10-Q 1 form10-q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2024

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File No. 000-55611

Hubilu Venture Corporation

(Exact Name of Registrant as Specified in its Charter)

Delaware		47-3342387
(State or other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

205 South Beverly Drive, Suite 205 Beverly Hills, CA		90212
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (310) 308-7887

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§230.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated file,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

	Large accelerated filer ☐		Accelerated filer ☐
	Non-accelerated filer ☒		Smaller reporting company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
N/A		HBUV		OTC Pink

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of August 19, 2024 the number of shares outstanding of the issuer’s sole class of common stock, $0.001 par value per share, is 26,237,125.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION	3
Item 1. Financial Statements	3
Condensed Consolidated Balance Sheets as of June 30, 2024 (Unaudited) and December 31, 2023	3
Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2024 and 2023 (Unaudited)	4
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the Three and Six Months Ended June 30, 2024 and 2023 (Unaudited)	5
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023 (Unaudited)	6
Notes to Condensed Consolidated Financial Statements (Unaudited)	7
Item 2. Management’s Discussion and Analysis of Financial Conditions and Results of Operations	15
Item 3. Quantitative and Qualitative Disclosures about Market Risk	21
Item 4. Controls and Procedures	21
PART II — OTHER INFORMATION	22
Item 1. Legal Proceedings	22
Item 1A. Risk Factors	22
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 3. Defaults Upon Senior Securities	22
Item 4. Mine Safety Disclosures	22
Item 5. Other Information	22
Item 6. Exhibits	23
SIGNATURES	24

Part I – FINANCIAL INFORMATION

Item 1. Financial Statements

HUBILU VENTURE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30,			December 31,
	2024			2023
	(Unaudited)
ASSETS
Current assets:
Cash	$	135,798		$	24,564
Accounts receivable		12,830			2,100
Prepaid expenses		493			9,500
Total current assets		149,121			36,164

Real estate:
Land		12,933,049			11,800,304
Building and capital improvements		6,508,628			5,458,695
Property acquisition and financing		423,477			296,463
Less: accumulated depreciation		(857,479	)		(762,406	)
Total real estate, net		19,007,675			16,793,056

Security deposits		31,600			6,600

Total assets	$	19,188,396		$	16,835,820

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current liabilities:
Accounts payable	$	45,655		$	21,250
Advanced rents received		4,774			10,124
Accrued interest		64,421			39,402
Security deposits payable		295,060			300,383
Due to related party, current maturities		474,271			474,271
Mortgages payable, current maturities		2,210,810			768,961
Dividends payable		192,401			179,463
Total current liabilities		3,287,392			1,793,854

Mortgages payable, related party		599,594			599,594
Mortgages payable		15,981,687			15,104,744
Convertible preferred stock payable		520,400			520,400

Total liabilities		20,389,073			18,018,592

Stockholders’ equity (deficit):
Common stock, $0.001 par value, 100,000,000 shares authorized, 26,237,125 shares issued and outstanding		26,237			26,237
Additional paid-in capital		956,726			911,894
Accumulated deficit		(2,183,640	)		(2,120,903	)
Total stockholders’ equity (deficit)		(1,200,677	)		(1,182,772	)

Total liabilities and stockholders’ equity (deficit)	$	19,188,396		$	16,835,820

See accompanying notes to financial statements.

HUBILU VENTURE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	2024			2023			2024			2023
	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023

Rental revenue	$	531,081		$	426,098		$	1,050,059		$	834,936

Operating expenses:
General and administrative		42,409			8,857			95,972			36,552
Salaries and benefits		19,600			15,700			34,000			31,600
Utilities		3,702			8,485			18,548			25,885
Professional fees		49,583			35,756			74,300			54,556
Property taxes		55,182			49,815			99,542			91,361
Repairs and maintenance		35,672			-			105,788			-
Depreciation		54,993			56,982			95,073			113,004
Total operating expenses		261,141			175,595			523,223			352,958

Net operating income		269,940			250,503			526,836			481,978

Other income (expense):
Dividends expense		(6,469	)		(6,469	)		(12,938	)		(12,867	)
Interest expense		(265,337	)		(242,395	)		(513,232	)		(471,199	)
Loss on early extinguishment of debt		(55,656	)		-			(63,403	)		-
Total other income (expense)		(327,462	)		(248,864	)		(589,573	)		(484,066	)

Net income (loss)	$	(57,522	)	$	1,639		$	(62,737	)	$	(2,088	)

Weighted average common shares outstanding - basic		26,237,125			26,237,125			26,237,125			26,237,125
Net loss per common share - basic	$	(0.00	)	$	0.00		$	(0.00	)	$	(0.00	)

Weighted average common shares outstanding - diluted		26,237,125			26,346,409			26,237,125			26,237,125
Net loss per common share - diluted	$	(0.00	)	$	0.00		$	(0.00	)	$	(0.00	)

See accompanying notes to financial statements.

HUBILU VENTURE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(Unaudited)

	Shares		Amount		Capital		Deficit			Deficit
	For the Three Months Ended June 30, 2024
					Additional					Total
	Common Stock				Paid-In		Accumulated			Stockholders’
	Shares		Amount		Capital		Deficit			Deficit

Balance, March 31, 2024		26,237,125	$	26,237	$	934,310	$	(2,126,118	)	$	(1,165,571	)

Imputed interest		-		-		22,416		-			22,416

Net loss		-		-		-		(57,522	)		(57,522	)

Balance, June 30, 2024		26,237,125	$	26,237	$	956,726	$	(2,183,640	)	$	(1,200,677	)

	For the Three Months Ended June 30, 2023
					Additional					Total
	Common Stock				Paid-In		Accumulated			Stockholders’
	Shares		Amount		Capital		Deficit			Deficit

Balance, March 31, 2023		26,237,125	$	26,237	$	834,914	$	(1,849,298	)	$	(988,147	)

Imputed interest		-		-		13,076		-			13,076

Net income		-		-		-		1,639			1,639

Balance, June 30, 2023		26,237,125	$	26,237	$	847,990	$	(1,847,659	)	$	(973,432	)

	For the Six Months Ended June 30, 2024
					Additional					Total
	Common Stock				Paid-In		Accumulated			Stockholders’
	Shares		Amount		Capital		Deficit			Deficit

Balance, December 31, 2023		26,237,125	$	26,237	$	911,894	$	(2,120,903	)	$	(1,182,772	)

Imputed interest		-		-		44,832		-			44,832

Net loss		-		-		-		(62,737	)		(62,737	)

Balance, June 30, 2024		26,237,125	$	26,237	$	956,726	$	(2,183,640	)	$	(1,200,677	)

	For the Six Months Ended June 30, 2023
					Additional					Total
	Common Stock				Paid-In		Accumulated			Stockholders’
	Shares		Amount		Capital		Deficit			Deficit

Balance, December 31, 2022 (Revised)		26,237,125	$	26,237	$	821,981	$	(1,845,571	)	$	(997,353	)
Balance		26,237,125	$	26,237	$	821,981	$	(1,845,571	)	$	(997,353	)

Imputed interest		-		-		26,009		-			26,009

Net loss		-		-		-		(2,088	)		(2,088	)
Net income (loss)		-		-		-		(2,088	)		(2,088	)

Balance, June 30, 2023		26,237,125	$	26,237	$	847,990	$	(1,847,659	)	$	(973,432	)
Balance		26,237,125	$	26,237	$	847,990	$	(1,847,659	)	$	(973,432	)

See accompanying notes to financial statements.

HUBILU VENTURE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	2024			2023
	For the Six Months Ended
	June 30,
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(62,737	)	$	(2,088	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		95,073			113,004
Imputed interest		44,832			26,009
Cumulative preferred stock dividends payable		12,938			12,867
Loss on early extinguishment of debt		63,403			-
Decrease (increase) in current assets:
Accounts receivable		(10,730	)		-
Prepaid expenses		9,007			-
Security deposits		(25,000	)		-
Increase (decrease) in current liabilities:
Accounts payable		24,405			-
Advanced rents received		(5,350	)		14,375
Accrued expenses		25,019			1,547
Security deposits payable		(5,323	)		29,010
Net cash provided by operating activities		165,537			194,724

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		(487,792	)		(222,434	)
Net cash used in investing activities		(487,792	)		(222,434	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds received from mortgages payable		530,000			102,100
Repayments on mortgages payable		(96,511	)		(134,866	)
Net cash provided by (used in) financing activities		433,489			(32,766	)

NET CHANGE IN CASH AND CASH EQUIVALENTS		111,234			(60,476	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		24,564			92,068
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	135,798		$	31,592

SUPPLEMENTAL INFORMATION:
Interest paid	$	445,243		$	443,643
Income taxes paid	$	-		$	-

Non-cash investing and financing transactions:
Acquisition of properties financed with debt	$	1,821,900		$	-

See accompanying notes to financial statements.

HUBILU VENTURE CORPORATION

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1 – Nature of Business and Significant Accounting Policies

Nature of Business

Hubilu Venture Corporation (“the Company,” “we,” “our” or “us”) was incorporated under the laws of the state of Delaware on March 2, 2015 and is a real estate consulting, asset management and business acquisition company, which specializes in acquiring student housing and corporate income properties and development/business opportunities located near the Los Angeles Metro/subway stations and within the Los Angeles area.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and the rules of the Securities and Exchange Commission (SEC). Intercompany accounts and transactions have been eliminated.

The unaudited condensed consolidated financial statements of the Company and the accompanying notes included in this Quarterly Report on Form 10-Q are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of the Condensed Consolidated Financial Statements have been included. Such adjustments are of a normal, recurring nature. The Condensed Consolidated Financial Statements, and the accompanying notes, are prepared in accordance with GAAP and do not contain certain information included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. The interim Condensed Consolidated Financial Statements should be read in conjunction with that Annual Report on Form 10-K. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the following entities, all of which were under common control and ownership at June 30, 2024:

	State of
Name of Entity	Incorporation		Relationship
Hubilu Venture Corporation⁽¹⁾		Delaware		Parent
Akebia Investments, LLC⁽²⁾		Wyoming		Subsidiary
Boabab Investments, LLC⁽²⁾		Wyoming		Subsidiary
Elata Investments, LLC⁽²⁾		Wyoming		Subsidiary
Kapok Investments, LLC⁽²⁾		Wyoming		Subsidiary
Lantana Investments, LLC⁽²⁾		Wyoming		Subsidiary
Mopane Investments, LLC⁽²⁾		Wyoming		Subsidiary
Sunza Investments, LLC⁽²⁾		Wyoming		Subsidiary
Trilosa Investments, LLC⁽²⁾		Wyoming		Subsidiary
Zinnia Investments, LLC⁽²⁾		Wyoming		Subsidiary

	⁽¹⁾	Holding company in the form of a corporation.
	⁽²⁾	Wholly-owned subsidiary in the form of a limited liability corporation.

Reclassifications

Certain reclassifications have been made to the prior years’ financial statements to conform to current year presentation. These reclassifications had no effect on previously reported results of operations or retained earnings.

HUBILU VENTURE CORPORATION

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Segment Reporting

ASC Topic 280, “Segment Reporting,” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. The Company operates as a single segment and will evaluate additional segment disclosure requirements as it expands its operations.

Fair Value of Financial Instruments

The Company discloses the fair value of certain assets and liabilities in accordance with ASC 820 – Fair Value Measurement and Disclosures (ASC 820). Under ASC 820-10-05, the FASB establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This Statement reaffirms that fair value is the relevant measurement attribute. The adoption of this standard did not have a material effect on the Company’s financial statements as reflected herein. The carrying amounts of cash, accounts receivable, accounts payable and accrued expenses reported on the balance sheets are estimated by management to approximate fair value primarily due to the short-term nature of the instruments.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customer. Under ASC 606, the Company recognizes revenue from leases with its various tenants under operating leases in accordance with a five-step model in which the Company evaluates the performance obligations in an amount that reflects the consideration which the Company expects to be entitled to receive in exchange for those services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation.

The Company’s sales are predominantly generated from leasing its properties to various tenants under operating leases. These sales contain a single performance obligation, and revenue is recognized on a straight-line basis using the effective interest method, based on the Company’s borrowing rate, over the life of the leases. The Company records adjustments to revenue for incidentals and move out, or janitorial reimbursements in the same period that the related revenue is recorded.

Basic and Diluted Loss Per Share

The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an “as if converted” basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For the periods presented, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption.

Note 2 – Going Concern

As shown in the accompanying condensed consolidated financial statements as of June 30, 2024, our balance of cash on hand was $135,798, and we had negative working capital of $3,138,271 and an accumulated deficit of $2,183,640. The Company expects to incur further losses in the development of its business, and may not be able to generate sufficient funds to sustain our operations for the next twelve months. Accordingly, we may need to raise additional cash to fund our operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. In the event revenues do not materialize at the expected rates, management would seek additional financing and would attempt to conserve cash by further reducing expenses. There can be no assurance that we will be successful in achieving these objectives.

HUBILU VENTURE CORPORATION

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The condensed consolidated financial statements do not include any adjustments that might result from the outcome of any uncertainty as to the Company’s ability to continue as a going concern. The condensed consolidated financial statements also do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern. Our ability to acquire new properties and increase revenues is largely dependent on our success in raising additional capital.

Note 3 – Significant Concentrations

The Company had certain customers whose revenue individually represented 10% or more of the Company’s total net revenue, or whose accounts receivable balances individually represented 10% or more of the Company’s total accounts receivable, as follows:

For the six months ended June 30, 2024, one customer accounted for 54% and 64% of revenue for the six months ended June 30, 2024 and 2023, respectively.

Note 4 – Fair Value of Financial Instruments

Under FASB ASC 820-10-5, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value.

The Company has cash and debts that must be measured under the fair value standard. The Company’s financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows:

Level 1 – Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 – Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

Level 3 – Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.

The following schedule summarizes the valuation of financial instruments at fair value on a recurring basis in the balances sheet as of June 30, 2024 and December 31, 2023:

	Level 1		Level 2			Level 3
	Fair Value Measurements at June 30, 2024
	Level 1		Level 2			Level 3
Assets
Cash	$	135,798	$	-		$	-
Total assets		135,798		-			-
Liabilities
Due to related party		-		474,271			-
Mortgages payable, related party		-		599,594			-
Mortgages payable		-		18,192,497			-
Dividends payable		-		192,401			-
Convertible preferred stock payable		-		-			520,400
Total liabilities		-		19,458,763			520,400
Net asset (liabilities)	$	135,798	$	(19,458,763	)	$	(520,400	)

HUBILU VENTURE CORPORATION

Notes to Condensed Consolidated Financial Statements

(Unaudited)

	Level 1		Level 2			Level 3
	Fair Value Measurements at December 31, 2023
	Level 1		Level 2			Level 3
Assets
Cash	$	24,564	$	-		$	-
Total assets		24,564		-			-
Liabilities
Due to related party		-		474,271			-
Mortgages payable, related party		-		599,594			-
Mortgages payable		-		15,873,705			-
Dividends payable		-		179,463			-
Convertible preferred stock payable		-		-			520,400
Total liabilities		-		17,127,033			520,400
Net asset (liability)	$	24,564	$	(17,127,033	)	$	(520,400	)

There were no transfers of financial assets or liabilities between Level 1 and Level 2 inputs for the six months ended June 30, 2024 or the year ended December 31, 2023.

Note 5 - Real Estate

Property Acquisitions

On June 27, 2024, we completed an acquisition, through our subsidiary Mopane Investments, LLC, the real property located at 1457 W. 35th Street in Los Angeles (“Mopane”). The property was vacant at the time of purchase. The acquisition was for $710,000 (“Purchase Price”). Terms of the acquisition are as follows: (1) A first position note with payment on principal balance of $624,750 issued by the Property Owner, Mopane, owing to lender, Churchill Funding I, LLC, bearing interest at 10% per annum, based on a 30/360 day year. Monthly payments of interest only in the amount of $4,998 commenced on August 1, 2024, and continue until July 1, 2025, at which time the entire principal balance together with interest due thereon, shall become due and payable. (2) A $130,000 second position note owing by Mopane to Belladonna Lily Investments, Inc. (“Belladonna”), whose terms of payments due were interest only, payable on unpaid principal at the rate of 6.00% per annum. Interest only payable in monthly installments of $650 or more on the 1st day of each month beginning on the 1st day of July 2024 and continuing until the 30th day of June 2029, at which time the entire principal balance together with interest due thereon, shall become due and payable.

On June 27, 2024, we completed another acquisition, through our subsidiary Mopane Investments, LLC, the real property located at 1460 North Eastern Avenue in Los Angeles (“Mopane”). The property was partially vacant at time of purchase. The acquisition was for $670,000 (“Purchase Price”). Terms of the acquisition as follows: (1) A first position note with payment on principal balance of $603,000 issued by the Property Owner, Mopane, owing to lender, LendingOne, LLC, bearing interest at 10% per annum, based on a 30/360 day year. Interest only payments in monthly installments of $4,774, or more, commenced August 1, 2024, and continue until April 1, 2025, at which time the entire principal balance together with interest due thereon, shall become due and payable. (2) A $175,000 second position note owing by Mopane to Belladonna, whose terms of payments due were interest only, payable on unpaid principal at the rate of 6.00% per annum. Interest only payable in monthly installments of $750 or more on the 1st day of each month beginning on the 1st day of July 2024 and continuing until the 30th day of June 2029, at which time the entire principal balance together with interest due thereon, shall become due and payable.

On May 8, 2024, we completed an acquisition, through our subsidiary Mopane Investments, LLC, the real property located at 4700 S. Budlong Avenue in Los Angeles (“Mopane”). The property was vacant at time of purchase. The acquisition was for $649,000 (“Purchase Price”). Terms of the acquisition as follows: (1) A first position note with payment on principal balance of $594,150 issued by the Property Owner, Mopane, owing to lender, Center Street Lending VIII SPR, LLC, bearing interest at the rate of 10.99% per annum, based on a daily rate of 360 days per year. Payable in monthly interest only installments of $4,984 or more starting on June 1, 2024, and continuing until April 15, 2025, at which time the entire principal balance together with interest due thereon, shall become due and payable. (2) A $175,000 second position note owing by Mopane to Belladonna, whose terms of payments due were interest only, payable on unpaid principal at the rate of 6.00% per annum. Interest only payable in monthly installments of $875 or more on the 1st day of each month beginning on the 1st day of May 2024 and continuing until the 31st day of March 2029, at which time the entire principal balance together with interest due thereon, shall become due and payable.

HUBILU VENTURE CORPORATION

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Schedule of Real Estate

The Company’s real estate investments consisted of the following at June 30, 2024 and December 31, 2023:

	June 30, 2024			December 31, 2023
Land	$	12,933,049		$	11,800,304
Buildings and capital improvements		6,508,628			5,458,695
Property acquisition and financing		423,477			296,463
Real estate gross		19,865,154			17,555,462
Less: accumulated depreciation		(857,479	)		(762,406	)
Total real estate, net	$	19,007,675		$	16,793,056

Depreciation and amortization expense totalled $95,073 and $113,004 for the six months ended June 30, 2024 and 2023, respectively.

Summary of Changes in Real Estate Investments

The change in the real estate investments is as follows for the six months ended June 30, 2024 and the year ended December 31, 2023:

	Six months ended		Year ended
	June 30, 2024		December 31, 2023

Balance, prior period	$	17,555,462	$	17,555,462
Acquisitions:		2,029,000		-
Real estate investment property, at cost		19,584,462		17,555,462
Current period capital improvements and property acquisition costs		280,692		-
Balance, end of period	$	19,865,154	$	17,555,462

Note 6 – Security Deposits

Security deposits included the following as of June 30, 2024 and December 31, 2023, respectively:

Schedule of Security Deposits

	June 30, 2024		December 31, 2023
Down payment on purchase of properties	$	25,000	$	-
Security deposits on office lease		6,600		6,600
Security deposits	$	31,600	$	6,600

Note 7 – Due to Related Party

As of June 30, 2024 and December 31, 2023, Jacaranda Investments, Inc., had provided total advances of $474,271. These advances are unsecured and do not carry a contractual interest rate or repayment terms. In connection with these advances, the Company has recorded imputed interest charges of $44,832 and $26,009 for the six months ended June 30, 2024 and 2023, respectively, which was credited to additional paid-in capital.

Note 8 – Mortgages Payable, Related Party

The Company’s mortgages payable to related parties are as follows:

	Principal balance
	June 30,		December 31,		Stated	Maturity
	2024		2023		Interest Rate	Date
2909 South Catalina Street	$	599,594	$	599,594	6.00%		April 20, 2029

On April 10, 2017, Esteban Coaloa loaned the Company $655,000 via an All Inclusive Trust Deed (“AITD”) as part of the purchase of 2909 S. Catalina Street, Los Angeles, California. This loan is considered a related party loan due to Esteban Coaloa’s preferred stock holdings. If converted to common stock at the current share price, the conversion would result in Mr. Coaloa owning > 5% of the Company’s outstanding common stock. This is an interest only promissory note with principal due on April 20, 2029. A total of $40,643 of accrued interest was owed and outstanding on this loan at June 30, 2024.

The Company recognized $17,939 and $17,988 of interest expense on notes payable for the six months ended June 30, 2024 and 2023, respectively.

HUBILU VENTURE CORPORATION

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 9 - Mortgages Payable

Mortgages payable consists of the following at June 30, 2024 and December 31, 2023, respectively:

Schedule of Mortgages Payable

					Interest Rate
		Principal Balance
				December 31,	Stated		Maturity
		June 30, 2024		2023	Interest Rate		Date
3711 South Western Avenue	$	643,585	$	643,585	5.00	%	December 1, 2029
3910 Walton Avenue		524,072		529,258	5.00	%	August 1, 2049
3910 Wisconsin Street		673,777		679,788	5.225	%	March 1, 2052
1557 West 29 Street		588,158		593,956	4.975	%	June 1, 2051
1267 West 38 Street		590,856		596,195	4.95	%	June 1, 2051
4016 Dalton Avenue		594,567		600,038	4.975	%	June 1, 2051
1618 West 38 Street
-First Note		473,759		477,482	6.30	%	January 1, 2050
-Second Note		150,000		150,000	6.00	%	December 10, 2025
1981 Estrella Avenue		875,917		883,908	5.225	%	June 1, 2051
717 West 42 Place
-First Note		334,567		335,167	6.85	%	November 1, 2048
-Second Note		134,968		134,968	6.85	%	April 30, 2029
2115 Portland Street		993,750		902,214	7.25	%	July 1, 2054
3906 Denker
-First Note		392,010		395,159	6.00	%	March 1, 2050
-Second Note		185,000		185,000	6.85	%	February 14, 2025
3408 Budlong
-First Note		592,771		598,527	4.875	%	December 1, 2051
-Second Note		120,000		120,000	5.00	%	November 1, 2029
3912 S. Hill Street
-First Note		492,649		496,174	6.425	%	December 1, 2050
-Second Note		152,000		152,000	6.425	%	November 1, 2026
4009 Brighton Avenue		702,028		708,367	4.875	%	November 1, 2051
3908 Denker Avenue		615,073		620,547	4.975	%	December 1, 2051
4021 Halldale Avenue		750,636		755,111	6.75	%	October 1, 2052
1284 W. 38^th Street
-First Note		631,249		637,267	4.625	%	March 1, 2052
-Second Note		188,000		188,000	5.25	%	June 30, 2029
4505 Orchard Avenue		631,720		637,567	5.00	%	March 1, 2052
3777 Ruthelen Street		692,670		699,061	4.625	%	March 1, 2052
3791 S. Normandie Avenue
-First Note		601,829		606,567	5.225	%	April 1, 2052
-Second Note		150,000		150,000	5.00	%	March 1, 2029
2029 W. 41^st Place		820,000		820,000	6.00	%	December 31, 2029
4517 Orchard Avenue
-First Note		467,922		471,632	5.225	%	April 1, 2052
-Second Note		158,000		158,000	5.00	%	March 1, 2029
1733 W. 37^th Place
-First Note		594,064		573,167	7.225	%	April 1, 2054
-Second Note		100,000		100,000	6.00	%	May 1, 2029
4700 S. Budlong Ave
-First Note		594,150		-	10.99	%	April 15, 2025
-Second Note		175,000		-	6.00	%	March 31, 2029
1457 W. 35^th Street
-First Note		624,750		-	10	%	July 1, 2025
-Second Note		130,000		-	6.00	%	June 30, 2029
1460 N. Eastern Avenue
-First Note		603,000		-	9.50	%	April 1, 2025
-Second Note		175,000		-	6.00	%	June 30, 2029

Hubilu General Loan		275,000		275,000	0.00	%	On Demand

Total mortgages payable	$	18,192,497	$	15,873,705
Less: current maturities		2,210,810		768,961
Mortgages payable, long-term portion	$	15,981,687	$	15,104,744

In addition to the mortgages incurred on current period property acquisitions disclosed in Note 5, the Company refinanced the following debts:

On June 14, 2024, the first and second note for 2115 Portland Street was refinanced for $993,750 with Ameritrust Mortgage, Corp., bearing interest on unpaid principal at the rate of 7.25% per annum. Principal and interest payable in monthly installments of $6,779 or more commenced on August 1, 2024, and continue until July 1, 2054, at which time the entire principal balance together with interest due thereon, shall become due and payable.

On March 16, 2024, the first note for 1733 W. 37th Place was refinanced for $595,000 with Investor Mortgage Finance, LLC, bearing interest at the rate of 7.225% per annum. Principal and interest payable in monthly installments of $4,049 commenced on May 1, 2024, and continue until April 1, 2054, at which time the entire principal balance together with interest due thereon, shall become due and payable.

The Company realized a $63,403 loss on early extinguishment of debt related to refinancing notes payable during the six months ended June 30, 2024.

The Company recognized $513,232 and $471,199 of interest expense on notes payable for the six months ended June 30, 2024 and 2023, respectively.

HUBILU VENTURE CORPORATION

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 10 – Convertible Preferred Stock Payable

The Company has authorized 10,000,000 shares of preferred stock, and designated 100,000 and 2,000,000 shares of 5% voting, cumulative convertible Series A (“Series A”) and Series 1 (“Series 1”) preferred stock (collectively, “Preferred Stock”), respectively.

The Series A matures on September 30, 2030, and Series 1 matures on September 30, 2029.

The Preferred Stock has the following rights and privileges:

Voting – The holders of the Preferred Stock shall be entitled to the number of votes equal to the number of shares of common stock into which such shares of Preferred Stock could be converted.

Conversion – Each share of Series A preferred stock, is convertible at the option of the holder, into shares of common stock, equal to three hundred thirty-three and 33/100 (333 1/3) shares of common stock, calculated by dividing the number of Series A preferred shares by $0.003. The Series A preferred stock is also subject to certain adjustments for dilution, if any, resulting from future stock issuances, including for any subsequent issuance of common stock at a price per share less than that paid by the holders of the preferred stock.

Each share of Series 1 preferred stock, is convertible at the option of the holder, into shares of common stock, at the lesser of $0.50 per share or a ten percent (10%) discount to the average closing bid price of the common stock 5 days prior to the notice of conversion. The Series 1 preferred stock is also subject to certain adjustments for dilution, if any, resulting from future stock issuances, including for any subsequent issuance of common stock at a price per share less than that paid by the holders of the preferred stock.

Dividends – The holders of the Preferred Stock in preference to the holders of common stock, are entitled to receive dividends at the rate of 5% per annum, in kind, which shall accrue quarterly. Such dividends are cumulative. No such dividends have been declared to date.

Liquidation – In the event of any liquidation, dissolution, winding-up or sale or merger of the Company, whether voluntarily or involuntarily, each holder of Preferred Stock is entitled to receive, in preference to the holders of common stock, a per-share amount equal to the original issue price of $1.00 (as adjusted, as defined), plus all declared but unpaid dividends.

The predominant settlement obligation of the convertible preferred stock was considered to be the issuance of a variable number of shares to settle a fixed monetary amount. Thus, these shares are scoped into the guidance of ASC 480-10 and are accounted for as a liability.

No shares of Series A preferred stock have been issued to date. Outstanding Series 1 preferred stock is as follows:

	Shares		Amount		Dividend in Arrears		Total

Balance, December 31, 2023		520,400	$	520,400	$	179,463	$	699,863
Dividends accrued		-		-		12,938		12,938
Balance, June 30, 2024		520,400	$	520,400	$	192,401	$	712,801

Note 11 – Commitments and Contingencies

Legal Matters

From time to time, the Company may be a party to various legal matters, threatened claims, or proceedings in the normal course of business. Legal fees and other costs associated with such actions are expensed as incurred. The Company assesses, in conjunction with its legal counsel, the need to record a liability for litigation and contingencies. Legal accruals are recorded when and if it is determined that a loss related to a certain matter is both probable and reasonably estimable.

Note 12 – Changes in Stockholders’ Equity (Deficit)

Common Stock

The Company has authorized 100,000,000 shares of $0.001 par value common stock. As of June 30, 2024, a total of 26,237,125 shares of common stock had been issued. Each holder of common stock is entitled to one vote for each share of common stock held.

No shares of common stock were issued during the six months ended, June 30, 2024.

HUBILU VENTURE CORPORATION

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 13 – Income Taxes

The Company accounts for income taxes under FASB ASC 740-10, which requires use of the liability method. FASB ASC 740-10-25 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences.

For the six months ended June 30, 2024, and the year ended December 31, 2023, the Company incurred a net operating loss and, accordingly, no provision for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. At June 30, 2024, the Company had approximately $1,472,000 of federal net operating losses. The net operating loss carry forwards, if not utilized, will begin to expire in 2025.

Based on the available objective evidence, including the Company’s history of its loss, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets at June 30, 2024 and December 31, 2023, respectively.

In accordance with FASB ASC 740, the Company has evaluated its tax positions and determined there are no uncertain tax positions.

Note 14 - Subsequent Events

Property Acquisitions

On July 25, 2024, the Company, through its subsidiary, Mopane Investments, LLC, signed a contract to purchase the real property located at 802 E. 25th Street in Los Angeles, California for $650,000. The acquisition is scheduled to close on approximately August 16, 2024.

Investments

On July 2, 2024, the Company closed on a Short Form Equity Stake and Investment Agreement (“Investment Agreement”) with Gula World, Gula Health Inc., and Gaya Ventures Inc, collectively referred to as (the “Gula Entities”), a conglomerate of spiritual and health-based product and services companies. The Investment Agreement required the Company to purchase Thirty-Two Thousand, Nine Hundred and Forty Dollars ($32,940) into the Gula Entities for a Four (4%) percent Non-Diluted Ownership Interest (“NDOI”) in the Gula Entities. Also included in the purchase are any and all assets and axillary products and companies that are owned, planned or may arise from the Gula Entities’ operations. Pursuant to the 4% NDOI purchased, the Company received the following interests in the Gula Entities (collectively referred to as, “Stock”):

Gaya Ventures Inc - 4,000,000 shares of Common Stock; $0.50 par value

Gaya Ventures Inc - 4 shares of Preferred Stock; $1.00 par value

Gula Heath Inc - 400,000 shares of Preferred Stock; $0.50 par value

Gula World - 400,000 shares of Common Stock; $1.50 par value

The Company did not receive voting rights for its NDOI. The Company also has the right to purchase an additional 13% NDOI in the Gula Entities over the following five-month period as follows:

$32,940 invested August 1, 2024 = 4% NDOI

$24,705 invested September 1, 2024 = 3% NDOI

$24,705 invested October 1, 2024 = 3% NDOI

$12,352 invested November 1, 2024 = 1.5% NDOI

$12,353 invested December 1, 2024 = 1.5% NDOI

If any of the Gula Entities issue any Stock before December 1, 2024, to any party (“Third Party”), besides Hubilu, the Gula Entities will issue Stock to Hubilu of at least Hubilu’s ownership interest at the time the Gula Entities issues the Stock to the Third Party. In the event Hubilu invests a total of $140,000 in the Gula Entities by December 1, 2024, Hubilu will be issued Stock equal to 17% of the Stock issued to Third Party.

In addition, the Company will be entitled to 50% of all sales generated from a referral program called, “Gift a Friend” (“GAF”), or similar named link that generates customer contact information from the Gulaworld.com website to the Gula Entities as part of any membership sales and/or products sold by the Gula Entities to its customers, net of their shipping costs and/or cost of service (“Royalties”).

Alternatively, the Company may elect to receive additional Stock on a Non-Dilutive basis as payment of Royalties in lieu of cash. This additional Stock received in the Gula Entities would include voting rights. Royalties are to be calculated on a quarterly basis.

Item 2. Management’s Discussion and Analysis of Financial Conditions and Results of Operations

You should read the following discussion of our financial condition and results of operations in conjunction with the condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. In addition to historical condensed financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements.

Overview

We were incorporated under the laws of the state of Delaware on March 2, 2015, and are a real estate consulting, asset management and business acquisition company, that specializes in acquiring student housing and corporate income properties and development/business opportunities located near the Los Angeles Metro/subway stations and within the Los Angeles area.

Due to high demand for houses from students, non- profit, and for-profit corporate tenants around the USC Campus and neighbouring Metro/subway stations, we have focused on acquiring multiple houses, remodeling and renting out. Rents have increased dramatically for houses in our target areas, allowing us to target larger and higher priced houses, while factoring in current interest rates.

With multiple properties within a small radius, we’re able to take advantage of economies of scale and benefit from property management efficiencies. Our focus is to continue acquiring houses and expand rental operations.

We purchased three new properties during the second quarter of 2024, and entered into agreements to acquire two additional properties during the third quarter of 2024. All properties have been purchased in conjunction with various debt financing arrangements.

Going Concern Uncertainty

As of June 30, 2024, our balance of cash on hand was $135,798, and we had negative working capital of $3,138,271 and an accumulated deficit of $2,183,640. We expect to incur further losses in the development of its business; therefore, we may not have sufficient funds to sustain our operations for the next twelve months and we may need to raise additional cash to fund our operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. In the event revenues do not materialize at the expected rates, management would seek additional financing and would attempt to conserve cash by further reducing expenses. There can be no assurance that we will be successful in achieving these objectives.

Results of Operations for the Three Months Ended June 30, 2024 and 2023

The following table summarizes selected items from the statement of operations for the three months ended June 30, 2024 and 2023, respectively.

	Three Months Ended
	June 30,				Increase /
	2024		2023		(Decrease)

Rental revenue	$	531,081	$	426,098	$	104,983

Operating expenses:
General and administrative		42,409		8,857		33,552
Salaries and benefits		19,600		15,700		3,900
Utilities		3,702		8,485		(4,783	)
Professional fees		49,583		35,756		13,827
Property taxes		55,182		49,815		5,367
Repairs and maintenance		35,672		-		35,672
Depreciation		54,993		56,982		(1,989	)
Total operating expenses

Hubilu Venture Corp [HBUV] Filings
10-Q	[2024-08-19]
10-Q	[2024-05-15]
10-K	[2024-04-16]
10-Q	[2023-11-08]
10-Q	[2023-08-09]
10-Q	[2023-06-09]
10-K	[2023-05-02]
10-Q	[2023-01-11]
10-Q	[2022-09-12]
10-Q	[2022-06-06]
10-K	[2022-03-31]
10-Q	[2022-01-07]
10-Q	[2021-11-02]
10-Q	[2021-09-16]
10-K	[2021-08-09]
10-Q	[2021-04-21]
10-Q	[2020-12-30]
10-Q	[2020-11-12]
10-K	[2020-07-17]
10-Q	[2020-01-02]
10-Q	[2019-12-10]
10-Q	[2019-11-18]
10-K	[2019-08-30]
10-Q	[2018-12-06]
10-Q	[2018-08-20]
10-Q	[2018-08-01]
10-K	[2018-05-16]
10-Q	[2017-11-17]
10-Q	[2017-08-21]
10-Q	[2017-05-15]
10-K	[2017-03-31]
10-Q	[2016-11-21]
10-Q	[2016-08-11]
10-Q	[2016-05-17]
10-K	[2016-03-30]
10-Q	[2016-03-07]
S-1	[2015-05-21]